The market opened lower, and is expected stable, on news that largely comes out of Greece (again.) Greece is still about two weeks away from any settlement with the IMF and EU community, and may request emergency funds during that interim. All of this has the market a bit unsettled, causing some flight to bonds.
On other news that could be market moving, yesterday Bank of Canada hinted at a rate increase, which increases the likelihood of the Fed moving to raise rates sooner — although no action was taken. There are rumblings beneath the waves that our longer term outlook is one of increasingly required national financial severity — as Greece is soon to experience from the IMF. The IMF is now broadening these statements to include the need for all nations. Between the IMF and Bank of Canada, the long term outlook is for a significantly higher increase in rates.
On Goldman news, the market effect of Goldman Sachs news has largely faded. Goldman is now stating that “the case hinges on one single employee” — whom they name, and are having de-registered from the Financial Services Registry. Ah, the times were in: get caught with your hand in the cookie jar, and point a finger to someone else whom you decide will be your sacrificial lamb. And then it’s all OK?
I convey a brief story from a personal time on Wall Street. For a decade I had run a document hand-delivery business out of Philadelphia. About a third of our business was on Wall Street. So I had the unique opportunity to ride the elevators all day long, and hear the chatter — under the radar: To New Yorkers, a courier was less than normal life, and no one held back their comments. (And I rarely, if ever, flinched at what I heard.) But it was an education of a lifetime. In short, I came to conclude that you cannot beat “the game.” The fix is SO in, from the “big boys” that they simply play on everyone else’s money. In one particularly poignant event, one stockbroker was sharing with another, in anguish, his current moral conflict regarding his boss: At the stated peril of losing his job, his boss was requiring him to call his accounts and sell something that he KNEW was going to go down. He had no choice: throw his clients (all of them) under the bus, or himself get rolled over by his boss. To his credit, this guy was having a problem. He was the only one on Wall Street that I ever experienced to have so much of a conscience.
Yeah, sure, Goldman; you were clean; and it was the one single employee. Sure, sure.
When I had first heard this news, I shared with my family that above experience, and said to them, they’re all that way. This isn’t just Goldman Sachs. –Or, depending on your narrower perspective, the single employee who is about to be “de-registered.” I personally feel that this corruption is rife. –They all do it. Trading companies are making billions off of the fact that the general public follows all the news provided to it, enabling them to have someone opposite the transaction that they desire. The little guy is financing this with his livelihood. Is it always this bad? No; but take the red pill. Read all the signs, and look for the realities behind the story — based on everything you see. And it’s not just corporate. These things don’t happen in a vacuum, at least not without assistance from Federal reports, and probably complicit agreed action.
Two days ago, Federal Reserve Bank of Chicago President Charles Evans said that while the U.S. recession is “definitely over,” unemployment will take time to decline and a low interest-rate policy is “very important” for now. “Definitely over.” I like that. …”Only one person.”
The rates are stable for today; but, for the long term, take the red pill.
